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Riverstone eyes US shale gas boom with $500m Meritage II investment

18 Jul 2012

Energy and power-focused private equity firm Riverstone Holdings has invested $500m in Meritage Midstream Services II to develop North American gas projects.

Meritage II said it hoped to capitalise on the boom in shale gas production across the continent by providing pipelines and other midstream infrastructure through both acquisitions and new developments.

Riverstone co-founder Pierre Lapeyre said, “We are delighted to partner with the Meritage management team in building a North American natural gas-based midstream business.

“The team has delivered in the past, and we believe its experience and deep knowledge of many of the emerging resource plays will yield exceptional results once again.”

Meritage II is led by chairman and CEO Steven Huckaby and president Nick Thomas, who have more than 40 years of combined midstream experience.

The pair formed Meritage I in 2009 focused on the Eagle Ford Shale, and sold it to Howard Energy Partners in April this year when it comprised a 102-mile lean gas gathering system.

Huckaby said, “Riverstone’s financial strength and insight together with our deep midstream experience and industry relationships put Meritage II in a very strong position.

“We look forward to working with the team at Riverstone to develop highly strategic gathering systems and processing facilities for natural gas and NGL producers.”

In May Riverstone  agreed to sell the oil and natural gas assets of Three Rivers Operating Company to Concho Resources for $1bn.

The firm has raised more than $21bn of equity capital across seven funds and co-investments, and is currently targeting $6bn for Riverstone Global Energy and Power Fund V – the first it has raised without buyout giant Carlyle.

That fund hit a second close of $4.5bn earlier this month.

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